The recently published UK Steel Strategy acknowledges that the shift to electric arc furnaces will result in a reduction of the workforce compared to blast furnace operation, Kallanish observes.
It notes that the UK’s remaining blast furnaces are reaching the end of their operational lifespan, and “it will be increasingly uneconomical for steel producers to sustain these ageing assets”.
As this infrastructure is replaced, steelmaking will move to decarbonised forms of production such as EAFs, aligning with both the “clear economic realities” and the UK’s Net Zero goals.
“Steel production is evolving, and the size and structure of the workforce will need to adapt,” it notes.
The workforce needed to support EAF production does look different to that of traditional blast furnaces, and likely smaller. Transition plans should therefore account for the impact of potential job losses, while maximising opportunities for new jobs in a future facing sector, it adds.
Carbon emission intensive methods like unabated blast furnaces face increasing carbon costs at home and abroad. The Strategy says retrofitting Capture, Utilisation and Storage (CCUS) to an aging blast furnace would be technically difficult, have operational efficiency limitations and would entail significant capital and operating costs, while it is not yet commercially proven.
However, it adds that blast furnace production will continue for the immediate future, and it is vital to security of supply that a managed transition is undertaken to maintain steelmaking and protect economic resilience.
No timeframe for this shift was published as part of the Steel Strategy. British Steel received planning permission approval for EAFs in Scunthorpe and Teesside in spring 2024. However, this was before the government’s intervention in early 2025.
The government continues to seek out private sector investment, both in existing steel sites and to deliver new steelmaking capacity and capability. It says it continues to work with British Steel’s owners to find a pragmatic, realistic solution for the future of the steelmaker. It has repeatedly expressed its preference to find a private sector partner for the transition.
As part of the EAF shift, it highlights scrap becoming a more valuable commodity, which will reduce reliance on iron ore and end the use of coal entirely.
However, producing certain grades of steel will require supplementing scrap with primary iron. The UK Primary Steelmaking Review recommends that in the short term, this can be met through imports of pig iron or DRI products from established market routes.
The economic case for domestically produced DRI will rely on energy pricing, the future development of the global DRI market, the chemistry of scrap supplies and progress in process or product innovation. Increased UK steel production would further improve the business case for investment in onshore DRI production.
